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Best's State Banking Reports
United States & District of Columbia

Glossary of Fields and Terms

Please note: Regarding the use of "average" assets and equity in bank ratios: The term "average" refers to the year-to-date average and is comprised of all quarters of data in the current calendar year plus December of the prior year.

Section 1: State Rankings and Statistics

Best's State Banking Statistics

• Number of Insured Institutions - Count of all insured commercial banks, state-chartered savings banks, and thrift institutions in the state.
• DeNovo Institutions - New insured institutions established in the current quarter.
• Total Banking Assets (mm) - Total balance sheet assets of institutions headquartered within a state.
• Total In-State Domicile Deposits (mm) - Total deposits of institutions headquartered within a state.
• Total SOD Branch Deposits (mm) - Sum of branch deposits by type of institution.
• State Banking Commissioner - Website for a state's banking or financial services department.

Key Economic Indicators and Trends

• Unemployment Rate (% of labor force) - Rank of 1 represents lowest rate and 51 the highest.
• GSP Growth - Source: Bureau of Labor Statistics; Calculation: A.M. Best Company.
• Non-business Bankruptcy Filings (000's) - Number of petitions filed for the previous 12 months; Source: U.S. Bankruptcy Courts.

Key Banking Indicators and Trends

• Total Banking Asset Growth, 1 year (%) - One year growth rate of total balance sheet assets.

• Total Banking Capital Growth, 1 year (%) - One year growth rate of total equity capital.

• Return on Assets - Annualized net income divided by average total assets.

• Non-perf Assets/Tang Equity + Loan Loss Reserves (%) - Nonaccrual and 90+ day past due loans and debt securities divided by total equity (less intangibles) plus loan loss reserves.

• Tier 1 Leverage - Tier one capital, less adjustments for financial subsidiaries, divided by average total assets for leverage capital purposes, less adjustments for financial subsidiaries.

Key Deposit Statistics and Trends

• In-State Domicile Deposit Growth, 1 year (%) - One year growth rate of deposits (on the balance sheet of banks who are headquartered within the state).

• Market Concentration (HHI) - Annual SOD data - Using the latest FDIC Summary of Deposit data, branch deposits for all banking institutions in each state are aggregated and compared using the Herfindahl -Hirschman Index (HHI). This index is a commonly accepted measure of market concentration in which the percent of market share of each institution in a market is squared and summed to arrive at an overall market concentration. HHI values above 1800 are considered concentrated, between 1000 and 1800 are considered moderately concentrated, and below 1000 are considered unconcentrated.

Section 2: State Economic, Banking and Deposit Statistics

Employment Stats Seasonally Adjusted - Thousands of Persons SA
Source: Bureau of Labor Statistics (employment figures represent change from same period prior year)

• Total Non-farm
  • Goods-Producing
  • Service-Producing
• Manufacturing
• Government
• Unemployment Rate (% of labor force)

Housing Indicators/Stats

• Median Price of New Single Family Homes Sold - Source: Global Insight.
• Home Price Index (%) - 1980 Q1=100; Source: Office of Federal Housing Enterprise Oversight.
• Housing Starts - Private housing starts - Seasonally adjusted (SA).
• Average Mortgage Payment - Source: Global Insight.
• Affordability Index - The affordability index is equal to 100 if the average household income is sufficient to purchase the average sale price of a home; Source: Global Insight.

Other Indicators

• GSP Growth - Source: Bureau of Labor Statistics; Calculation: A.M. Best Company.
• Population Growth - Source: Bureau of the Census.
• Average Household Income (000's) - Seasonally Adjusted Annual Rate (SAAR). Source: Global Insight.
• Non-business Bankruptcy Filings (000's) - Number of petitions filed for the previous 12 months; Source: U.S. Bankruptcy Courts.

Key Banking Indicators and Trends

• Median Banking Asset Growth, 1 year (%) - One year growth rate of total assets.

• Median Banking Capital Growth, 1 year (%) - One year growth rate of total equity capital.

• Median Banking Deposit Growth, 1 year (%) - One year growth rate of total in-state domicile deposits.

Profitability (Median)

• Return on Average Assets - Annualized net income divided by average total assets.
• Net Interest Margin - Annualized net interest income divided by average interest-earning assets.
• Loss Provisions/Average Assets - Annualized loan loss provision divided by average total assets.
• Non-interest Income/Average Assets - Annualized noninterest income divided by average total assets.
• Overhead to Average Assets - Annualized noninterest expense divided by average total assets.

Loan Concentrations (Median % of Tangible Equity)
The following loan concentrations ratios are calculated as a percent of total equity capital less intangibles.

• Residential Real Estate - Mortgages and lines of credit secured by 1-4 family residential properties.
• Commercial Real Estate - Construction loans, multifamily residential, and nonfarm nonresidential loans.
• Construction & Development - Construction, land development, and other land loans.
  • Multifamily Residential Real Estate - Real estate secured by multifamily (5 or more) residential properties.
  • Non-residential Real Estate - Non-farm, nonresidential (commercial) real estate
  • Agriculture - Loans to finance agricultural production and other loans to farmers.
• Commercial & Industrial - Commercial and industrial loans.
• Consumer - Credit cards and all other loans to individuals.

Asset Quality (Median % of Total Assets)

• Past-Due & Non-accrual Assets - Loans, leases, and debt securities 90+ days past due or in nonaccrual status divided by total assets.
• Restructured Loans - Restructured loans and leases divided by total assets.
• Other Real Estate Owned - Non-investment, bank-owned real estate divided by total assets.
• Total Charge-Offs - Annualized gross charge-offs as a percent of average total assets.
• Loan Loss Reserves - Allowance for loan and lease losses divided by total assets.
• Loan Loss Reserves/Non-performing Assets - Allowance for loan and lease losses divided by loans, leases, and debt securities 90+ days past due or in nonaccrual status.
• Non-perf Assets/Tang Equity + Loan Loss Reserves - Loans, leases, and debt securities 90+ days past due or in nonaccrual status plus other real estate owned divided by total equity capital less intangible assets.

Capital (Median %)

• Tangible Equity/Total Assets - Total equity capital less intangible assets divided by total assets.
• Tier 1 Leverage - Tier 1 capital, less adjustments for financial subsidiaries, divided by average total assets for leverage capital purposes, less adjustments for financial subsidiaries.
• Retained Earnings/Average Equity - Annualized net income less dividend payments divided by average equity capital.
• External Capital/Total Equity - Sale, conversion, acquisition, or retirement of capital stock (net) divided by total equity capital.

Liquidity/Funding (Median % of Total Assets)

• Gross Loans - Loans and leases, including unearned income, divided by total assets.
• Non-core Funding - The sum of insured brokered deposits less than $100,000, federal funds and repos purchased, foreign deposits, time deposits greater than $100,000, and other borrowings divided by total assets.
• Off Balance Sheet Exposures - The sum of unused commitments, letters of credit, credit derivatives, securities lent, merchant credit card sales, securitized assets, exposure to credit enhancements, recourse from asset sales, and all other off-balance sheet assets less all other off-balance sheet liabilities divided by total assets.
• Liquid Assets/ST Debt - The sum of interest bearing bank balances, fed funds and repos purchased, assets held in trading accounts, and debt securities with a remaining maturity of one year or less divided by FHLB advances and other borrowings with a maturity of one year or less.

Key Deposit Statistics and Trends

• Most SOD Branch Deposits (Top 20 Institutions) - A list of the top 20 institutions within a state as measured by total branch deposits from the latest FDIC Summary of Deposits survey.

• Market Concentration (HHI) - Branch deposit market concentration within a state as measured by the Herfindahl-Hirschman Index. (See the definition of Market Concentration (HHI)--Annual SOD data for a detailed description of the HHI).

• Largest Deposit Markets - Branch deposits for the largest counties within a state.

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(Document updated 3/27/09)